Tomorrow morning, chip designer ARM Holdings
As the dominant player behind the designs of nearly all mobile application processors, expectations have been running high for quite some time, as shares now trade near 70 times earnings.
Analysts are looking for revenue of $201.2 million and earnings per share of $0.14. That sales forecast is right on target with the company's own guidance, which expects revenue to be right around $200 million. The company easily topped expectations last quarter, as it continues to build momentum in inking new licensing deals that pave the way for years of recurring royalty revenue.
That top-line estimate for the current quarter represents a modest 8.5% sales growth, with the bottom line being just a penny better than the $0.13 EPS seen last year.
ARM is treading carefully with its guidance for full-year 2012, as it expects macro uncertainties to affect consumer and enterprise spending and potentially hurting the broader semiconductor industry. Assuming the macro picture doesn't get worse, the company is looking for full-year revenue of a little more than $860 million.
This year will be an important competitive test for ARM and its partners, as Intel
Most consumers aren't likely to be familiar with the offering, but domestic players including Motorola Mobility
In the interest of full disclosure, I recently sold my own ARM shares. I like the company's prospects, but I began to have reservations over its high multiples and royalty monetization. On top of that, I needed to do some rebalancing in my portfolio for personal reasons, as I'm already too overweight in high-multiple stocks.
That being said, ARM's future remains promising in growth areas like smart TVs, embedded devices, servers, and Microsoft
With ARM's earnings tomorrow, I'm expecting the company to deliver another solid quarter with growing chip shipments.
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Fool contributor Evan Niu holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Intel and Microsoft. Motley Fool newsletter services have recommended buying shares of Microsoft and Intel and creating a bull call spread position in Microsoft. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.